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We’re Hearing That Offers Owners Did Not Take Six Months Ago, They Are Trying To Get Those Offers Today

A report from the Boston Globe in Massachusetts. “The state’s housing market wrapped up the summer the same way it started: Tight and expensive. But there are signs in some parts of the market that things may be topping out. ‘We are starting to see more buyers act with less urgency and exercise more caution before making an offer to purchase,’ said GBAR president Jim Majo. ‘With home prices moderating and mortgage rates steady, buyers aren’t feeling pressured to make as quick a decision to buy as they did last spring or a year ago. We’re seeing a number of communities in Greater Boston wherein home prices have either peaked or begun to decline ‘”

From Crain’s New York Business. “A drop-off in apartment building purchases in July didn’t just cut into landlords’ wallets—it deprived the city and state of millions of dollars, a leading industry group argues. ‘This has been the slowest month since 2011,’ said REBNY senior economist Laura Tomana. ‘We’ve been talking to people in the industry, who describe a real hesitation to invest in multifamily. We’re hearing that offers that owners did not take six months ago, they are trying to get those offers today.'”

From Bethesda Magazine in Maryland. “Over the last decade, Northern Virginia’s economy has been steadily pulling ahead of suburban Maryland’s. Other than in Prince George’s County, where County Executive Angela Alsobrooks recently told developers to “get in now,” there is no real urgency around economic growth here. In fact, MoCo followed its housing slump with a partial housing moratorium.”

The Chesterfield Observer in Virginia. “It’s a seller’s market in Chesterfield County – and a buyer’s market, too – but only in certain price ranges and neighborhoods. ‘In certain price points, around $400,000, there is too much inventory, and the houses aren’t moving,’ says Derek Radtke, supervising broker with RE/MAX Action Real Estate. ‘The reason for that, especially in Chesterfield County, is the new home sales.”‘

“As an example, Radtke points to Hampton Park, a planned community off Hull Street Road that dates to the late 1990s and early 2000s. Hampton Park has a good number of homes for sale, but ‘right down the road is Magnolia Green, [a planned community currently under construction], where you can pick up a brand new home for not that much more than what they sell for in Hampton Park.'”

The Dallas Morning News in Texas. “Residential building starts in North Texas fell by almost 40% in August from a year ago and are down 18% year-over-year for the first eight months of 2019, according to a new report from Dodge Data & Analytics. The drop in residential construction activity confirms reports of a slowdown in both single-family home building and apartment starts in the D-FW area.”

“‘The year-to-date activity continued to suggest that this year’s levels are easing back from what was seen in 2018 – essentially mirroring the slowdown in overall economic growth,’ said Richard Branch, Chief Economist for Dodge Data & Analytics.”

The Nevada Current. “Self-curing concrete. Energy-generating sidewalks.  Those are just a few of the futuristic attractions promised for Bleutech Park, an alleged $7.5 billion dollar project slated for an undisclosed location in Las Vegas, according to spinmeister Tom Letizia. But now Bleutech Park, which also promised affordable, workforce housing, may be little more than another mirage in a desert that’s seen more than its fair share.”

“The Miami Herald reports the engineer behind the Bleutech project, Janet LeGrand, aka Janet Garcia, is a fraud whose engineering firm attempted to bilk Homestead, Florida of some $33.3 million for a public project. Martin-Harris Construction, featured by Bleutech as a partner in the Las Vegas project, declined to say whether it investigates the backgrounds of developers seeking to do business with the company.”

“‘As only the General Contractor, we have no comment at this time,’Guy Martin, president of Martin-Harris said in an email.”

The Union Tribune in California. “San Diego County’s median home price in August was down annually for the first time in seven years, albeit a small reduction, CoreLogic said. Mark Goldman, a real estate analyst with C2 Financial Group, said the numbers were a bit surprising given that August is peak buying season. ‘Prices leveling off are something to keep an eye on, but not a reason to panic,’ he said. ‘Will prices plummet? I don’t think so.'”

“Gary Kent, a La Jolla-based real estate agent, said he hasn’t heard a ton of excitement from buyers about lower interest rates. Probably making it easier for some agents, Kent said sellers are becoming more aware that price gains have slowed a bit.”

“‘(The market) is not too cold, it’s not too hot. It’s right in the middle,’ he said. ‘There are some people that are saying they will buy when the market crashes. I think they are going to be disappointed.'”

“There are signs the housing market will start to pick up steam in the coming months, said Chris Thornberg, economist and founding partner of Beacon Economics. He said prices would be the last thing to change in a market already stimulated by low interest rates. He said there are already signs showing a turn, especially with national home sales being up.”

“‘By the end of the year, price growth is going to be up again and next year it will be a very healthy number,’ he said. ‘It is all driven by the fact that these interest rates are low and giving a lot of life to the market.'”

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This Post Has 96 Comments

  1. “San Diego County’s median home price in August was down annually for the first time in seven years, “

    Finally. And a 100 basis point interest rate pull back on 30 y fixed only bought them two to three months before the red tide hit. How many more months before all the FHA 3%ers are underwater?

    1. Which means they’ve been falling for over a year. We’ve known that for a while. Thornberg said this couldn’t happen, which is a bizarre thing for an economist to assert.

      1. From the UT article:

        ‘Here’s how August’s numbers broke down by home type: Resale single-family homes: Median price of $630,000, down from peak of $649,000 in June. Newly built homes: Median price of $710,000, down from all-time high of $812,500 in October 2018.’

        So new shacks are off 100k. That’s where this is headed, new gets under existing and whammo.

        This thing has blown, over a year ago in latter markets and 4 years ago in Miami, 3 years ago in NYC. That’s why I brushed off the ankle biters. I don’t have time to moderate their whining. I know for a lot of you it’s just about a cheaper shack. But the main issue to me: is there a housing bubble? That’s been settled IMO. Now we find out what happens next and decide how to make hay.

        1. I thought they might be able to prolong this for another few years with drastic interest rate cuts, but, if 100 basis points only bought them a few months, i’d have to conclude I was wrong and that interest rate cuts are not going to keep this turd afloat. Then the only question becomes are they going to implement something more drastic like literal free money.

          1. I don’t get this idea that “they” are going to do this or that. Prices have been falling in some markets for 5 years, in many “hot” markets for a year and a half. So where are “they”? How many articles have we seen with half or a third off? Look at the Dallas article. Remember the new shack ponzi scheme I posted few months ago? There’s hardly any fresh lunacy left to uncover.

            We’re back to no-doc zero down loans and it’s still going down, faster than ever IMO.

          2. “We’re back to no-doc zero down loans and it’s still going down”

            But we aren’t back to I/O and neg-am. That’s about all they can do to re-inflate the bubble.

          3. That’s about all they can do

            There are probably toxic tricks that we haven’t yet imagined, but once the acceleration of prices stopped and they began to fall, I think it is too late to prevent a collapse. They would need a new virgin China Miracle and I don’t see where that’s going to come from.

          4. Wait for the negative interest rate mortgage. That’s when you know we pass peak! Until then, we are just pulling in more suckers in at peak

            BTW, the low interest rate has done miracle for building. There was a construction site near me that is starting to build up. I thought this lots would be abandoned in late 2018. I guess low rate brought it back to life. Gonna add hundreds more units to the supply.

          5. Saw a huge billboard for a company that sells, no-doc zero down loans for the first time in San Francisco in the inner richmond district.

  3. ‘There are some people that are saying they will buy when the market crashes. I think they are going to be disappointed.’”

    We’ll see about that.

  4. “There are signs the housing market will start to pick up steam in the coming months, said Chris Thornberg, economist and founding partner of Beacon Economics.

    Where ya been, Chris? And how ’bout those mix markets?

      1. The REIC touts and shills have been promising green shoots “in the coming months” since the beginning of the year. Meanwhile, housing fundamentals keep deteriorating.

        One of these things is not like the other, quoth Ben.

    1. I recall GS-fixr saying that private jets depreciate like bricks, so I doubt they will get anything close to the $60M back, assuming they can find a buyer.

          1. For any of you pukes who are too lame to click on the link I will do it for you.

            Here …

            There are two types of costs for aircraft operations: Fixed Costs, and Variable Costs:

            I will detail the two here:

            Annual Fixed Costs:
            Pilots $231,750.00
            Crew Training $69,380.80
            Hangar $80,000.00
            Insurance $60,000.00
            Aircraft Miscellaneous $28,500.00

            Total Fixed Costs: $444,630.80

            Variable Costs (these are hourly):
            Fuel (320 gph at $5.80 per gallon) $2,204.00
            Airframe Maintenance $243.39
            Engine/APU Maintenance $709.51
            Crew Misc. $350.00

            Total Variable Costs (Per hour): $3,263.51

            The Total Costs Per Hour do down, the more you fly so I have listed the Annual Budgets for 100, 300, 500, and 1000 hours. These are probably the numbers you are looking for.

            Annual Operating Budget

            100 Hours $770,981.80
            300 Hours $1,423,683.80
            500 Hours $2,076,385.80
            1000 Hours $3,708,140.80

          3. Some employees told Business Insider that the optics of the Gulfstream upset staff members who couldn’t get promised bonuses and raises while the company spent millions on the plane and parties. It also raised red flags with investors.

          4. @rms

            I’ve encountered plenty of “Entrepreneurs” over the years that are quick to obtain all the flashy trappings as soon as their “business” can afford it (or sooner).

            The personality type I usually associate with that is not one I particularly care for.

            The optics are pretty clear – the sense of superiority and deservedness are there for all to see. After all you can’t spell SillyCONvalley without CON.

      1. The jet isn’t the only thing happening….just the beginning and believe it or not, the team, I hear, seems very excited about the opportunity to see if righting this ship can be done. It will be an interesting case study when all is finished… success or fail.

        1. From what I’ve read and heard, it can be done. It would be sad to see an entire workforce let go.

          2. Jobs don’t all vanish into thin air in a bankruptcy. Someone will pick up the pieces at a more economical price and run a property management company in a hopefully more efficient and profitable way.

    1. So people don’t want to pay thousands of dollars for the privilege of being yelled at through a telecsreen by an impossibly fit young models? Shocker.

      1. It’s almost like you can tape an iPad to a regular stationary bike and go on YouTube for a significantly cheaper but similar experience…

        1. I ran 10 miles on my Peloton treadmill this morning and I can tell you that they do have a competitive advantage. I have run on dozens of Treadmills and they have a good thing going. Whether or not they are worth the valuation of their IPO I will let the market decide. But they are delivering something of value and I think the future is good for them.

          1. For $4,000+ it’d better be a damned good treadmill!

            But the “Tech” side of their business, the one used to justify their “value”, is the streaming service, and YouTube is filled with free streams for a variety of workouts. I’m not sure their competitive advantage.

          3. For $4,000+ it’d better be a damned good treadmill!

            Actually, $4k is really just starting point for a commercial treadmill. I put in an entire workout room in our new phase in our SLC apartment complex (340 units) and each commercial LifeFitness machine was about $6k. Yeah, you can get some retail treadmills for $1k-$2500, but if you are going to go with True, LifeFitness, Landice, or Woodway, you are going to shell out some money.

            Going with Peloton is kind of a big risk for me because they are so new. But they got the nod from Runner’s World as an editor’s choice and I trust their rep. So it’s a bit of an experiment. Keep in mind that I run about 50-70 miles a week, so it’s worth it to me to have a good setup.

          4. Can you rig that thing up to charge the Tesla?

            Fun fact: to my knowledge, the human body is the most efficient machine when it comes to converting ATP (e.g. chemical energy) into kinetic energy.

    2. The real question is, what are the primary-dealer banks leaving the Fed as collateral? Looks like the perfect opportunity for the banksters to unload toxic waste assets at par, then take their billions in freshly printed Yellen Bux and buy more speculative assets.

    4. The Fed’s repo operations are highly unusual. The Fed launched them after short-term repo rates spiked to nearly 10 percent last week as financial firms sought short-term funding. Stress–and Fed intervention–is expected to continue through the end of the year although the current Fed program officially expires on October 10.

      Show of hands: who thinks the Fed is going to stop pumping liquidity into the repo market after October 10?

      Without QE-to-Infinity, the Fed’s financial house of cards is going to come crashing down under the weight of its own fraud and fictitious valuations.

    1. Appraiser fraud?

      Is there anyway you can post links to support your headlines? I don’t doubt them but I usually want to know more about what you say in the link yet your link isn’t related to anything but the data.

    1. I shot some video last week in the Brickell area of Miami. I’ll try to get it edited and posted here this weekend.

      I don’t think I mentioned: I usually don’t care for big cities, but I liked that part of Miami. The people are really nice, it’s clean – the condos and hotels are certainly uncontaminated with people! Lots to do. I got the feeling English is the second language. Very few homeless. It was generally the fittest bunch of people I’ve seen in many years.

      1. Surprising that there aren’t more homeless in Florida. It seems like the best place to be if you have to live outside.

    2. Interesting read. Thanks. Learned something about the hard money lending market. I did get the sense though that the conversation was highly paraphrased or perhaps even fictional…maybe just to illustrate the circumstance. Not questioning the conclusions because I don’t have any knowledge of the subject matter.

  13. HEARD ON THE STREET WSJ Sep 26, 2019

    Housing Is Still a Has-Been
    Lower mortgage rates and a benign economic backdrop have helped boost the housing market recently, but the gains are hardly impressive.

  14. What do you guys think of a 1031 exchange in this market. Of course it makes sense to avoid a big tax hit, but IF prices were to fall ~15% in the next year or two (and we’re seeing lots of price drops) it could easily be a wash or better. And with the benefit of not being locked into a 45 day window…

    1. And with the benefit of not being locked into a 45 day window…

      It sounds like you’re considering a purchase without a 1031 exchange. The answer to your question depends on, at least, the properties’ relative locations and whether you want to keep the property you would be selling for the 1031 exchange. I’ve chose to do a 1031 exchange because the San Diego market is far too high to enter as a first-time buyer. The 1031 exchange allows me to transfer 20 years of appreciation from a coastal property inland. When property values fall, I’ll have the new property taxes reassessed.

    1. Look at the SD and Chesterfield data. New shack prices are creeping toward or below existing. Artificially high prices only make this worse. Pretty much every US metro is overbuilt. Sure, pour some gas on the embers, it’ll only create a bigger oversupply.

  17. Bad lipstick on a pig: https://www.realtor.com/realestateandhomes-detail/17035-Edina-Ct_Poway_CA_92064_M15080-71607?view=qv

    Seller couldn’t sell between February and July so took it off the market for a “remodel.” Realtor removed the photos from the previous listing, but it looks like the “remodel” was new flooring, paint and hardware on the kitchen cabinets, a new white subway tile backsplash and new countertop. Seller’s asking additional $100K. Good luck!

    1. 100-150k seems to be the mark up for cosmetic make overs on flips around SD the last few years. I wonder if all that grayish manufactured wood flooring will end up being the Formica of yesteryear. It’s in every flipped house in the county.

  20. “Over the last decade, Northern Virginia’s economy has been steadily pulling ahead of suburban Maryland’s”

    NoVa is a hotbed of defense contracting and cybersecurity. Amazon will attract more FAANGs. MD is (was) a hotbed of boring fuddy-duddy domestic agencies like DOE, FDA, NIH, some IRS, HHS, etc. Virginia is young and Maryland is getting old. People are retiring in droves and agencies are not re-filling the pipe. So it’s not surprising.

    1. I really dislike the vociferous Faux News’ format, but their penchant for hottie news ladies deserve a thumbs-up!

    2. Boulders, lmao! Since it looks like WeWork is WeBroke now (sure happened fast after the IPO got shelved, didnt it?), maybe the benevolent open minded of Cali can pay to house those homeless in all that unused office space. Because they care soooo much – I’ve seen the signs on their lawns – hate doesnt live there, no sireebob.

      Has the CEO fled to Israel or Brazil yet and did his jet (now up for sale) have an adrenochrome dispenser on it?

    2. And if you don’t like it, you can always hit the back button to go back to Reddit.

      Nobody has ever sold a used house at a loss on Reddit. Nobody…

  24. Are you ready for the invasion of the robotic used home sellers?

    Why buying and selling a house could soon be as simple as trading stocks
    Published: Sept 26, 2019 8:01 p.m. ET
    Artificial intelligence in housing could completely change the way we buy, sell and live
    Illustration by Glenn Harvey
    It appears iBuying was just the beginning. Get ready for machine learning to remake real estate altogether.
    By Andrea Riquier

    On a recent weeknight, Dahlia and Adam Brown came home to their spacious Colonial on a quiet cul-de-sac in Marietta, Ga. The Browns both work demanding jobs and have two young sons. They bought the house in June using Knock, a company that’s trying to revolutionize the real-estate industry with a “home trade-in platform” making it easier to buy and sell at once. That solution was ideal for the Browns, who are just as busy as most couples but more introverted, making the idea of prospective buyers tramping through their private space seem excruciating.

    Across town, Martha Seay was overseeing movers in a rambling brown ranch-style house nestled among tall hickory trees. The day before, she had closed on the sale of the house, where she and her husband had raised their family, to the real-estate company Zillow. The next day she would leave for Florida’s Gulf Coast, where the couple had just bought a retirement home.
    …

  25. Ground Control to Major Tom
    Your Tesla ‘s dead, there’s something wrong
    Can you hear me, Major Tom?
    Can you hear me, Major Tom?

    Listen: Fremont Cop Radios For Help After His Tesla Battery Dies During High Speed Chase

    by Tyler Durden
    Wed, 09/25/2019 – 22:10

    A Fremont police Tesla engaged in a high speed chase last Friday ran out of battery power while in pursuit of “felony vehicle”, according to the Mercury News.

    The department’s Model S was in pursuit of a vehicle and was traveling at speeds of up to 120 miles per hour on the highway when the officer driving it radioed in that he might not be able to continue the chase he was leading.

    Officer Jesse Hartman said to fellow officers nearby:

    “I am down to six miles of battery on the Tesla so I may lose it here in a sec. If someone else is able, can they maneuver into the number one spot?”

    https://www.zerohedge.com/technology/listen-fremont-cop-radios-help-after-his-tesla-battery-dies-during-high-speed-chase

  26. I have been thinking lately about how private sector jobs went down, and bloated government jobs went up.
    You got this big special interest group, being government workers, that would have a vested interest in seeing big government.

    We tend to think of the big Coporate special interest and the elites, but the massive special interest of the government worker is real.

    All these Politicans are what,. Government Workers!

    Of course they hate Trump who wanted to increase private sector jobs.

    They are all so self serving.

    1. “I have been thinking lately about how private sector jobs went down, and bloated government jobs went up.”

      After the financial crisis many workers in flyover country lost their jobs and went on unemployment for 2-yrs. When that was exhausted Congress granted a 1-yr extension. When that was up they allowed a huge number of these low skill set workers to file for permanent federal disability, which would bring additional outside dollars to these bleak regions of the country.

  27. Have you ever noticed how big government tries to treat you like a child ,and they foster the idea of being dependent on government. They are highly offensive to me. And these current bribes to get votes are a joke.

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